Greeks displayed a European Union flag adorned with the word 'Nai,' or Yes' in Greek, during a pro-Euro rally in front of the parliament building, in Athens Tuesday.

Jean-Paul Pelissier

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Athens

The pensioners of Greece are sitting on the front lines of an epic struggle for Greece’s future – as both the defenders of the country's retirement system and the citizens most vulnerable if it comes undone.

But at the Central Market of Athens, the seniors mingling among stalls of thick pig hooves and expertly filleted fish say they'd prefer not to be the protagonists in a drama whose plot takes another sharp turn at midnight, when Greece is expected to miss a crucial loan repayment.

But if the couple had to confront either more cuts or ouster from the eurozone? “We’d choose to be in the eurozone,” chimes in Stavros Kokkinis.

Greek seniors have been the beneficiaries of a pension system that included early retirement and generous checks. But it was unsustainable – and even with a dramatic overhaul since 2010, creditors say more cuts are still needed. Greek pensioners, however, many of whom live in poverty, say they’ve suffered enough. And Prime Minister Alexis Tsipras, who won election in January on an anti-austerity pledge, has long argued that to cut more is to topple what has become a cornerstone of the family safety net.

But the row over pensions could decide whether Greece stays in the eurozone – and some say that is prompting retirees to rethink their push to protect pensions at all costs. “If there were a sudden increase in inflation, it’s pensioners that will have to pay, they are the most exposed,” says Platon Tinios, an specialist in pensions at Piraeus University and a long-time proponent of pension reform.

Greece’s pension system was heading toward bankruptcy well before the eurozone crisis, consuming 12 percent of GDP in 2007. That number was projected to double by 2060, in large part because of Greece’s aging society. The system was full of quirks and exceptions, too. Some people received checks practically on par with their former salaries. The list of those who could retire early for arduous work was massive, and infamously included hairdressers and veterinarian sperm collectors. Many Greeks were able to retire in their 50s, especially those employed in the public sector.

Creditors' demands for reform began to be met only when they were linked to bailout money in 2010 and 2012. Retirement ages for receiving full pensions rose from 60 to 65 for women, and then to 67 for everyone. The percentage of pre-retirement income that workers could receive was dramatically reduced – by up to 50 percent for some.

But loopholes and a wave of early retirements during the crisis means Greece has further to go. Creditors have asked the Greek government to build stronger disincentives for early retirements as well as other reforms, something that could restore 1 percent of GDP.

Such changes are small compared to the massive reforms that pensioners have already accepted. But they're politically untenable for Tsipras’s leftwing government – and much of society. Of 2.5 million retired Greeks, 45 percent live below the poverty line of 665 euros ($740) a month, the government said recently.

Pensions are the sole source of income in many families. But Mr. Tinios sees a larger structural problem: a top-heavy social welfare state, where seniors get outsized support while others, like unemployed youths, struggle with much less. The setup strengthens family obligation, and short-circuits a more equally distributed social policy, he argues. “Why do you have to pay the grandfather to pay the grandson,” he asks, instead of providing work opportunity for the latter? “Whereas it is so blindingly obvious it’s a generational problem, it’s never seen that way.”

Indeed, to many outside of Greece, the country is still unwilling to move toward the deep, structural change that all aging societies face. “There is no question that [Greeks] have been more resistant, that is absolutely clear,” says Mitchell Orenstein, who studies global pension privatization at Northeastern University in Boston. “Baltic countries had pretty similar economic crises, around 2009, and implemented just as sharp changes and didn’t make a big fuss about it.”

Manolis Rallakis, a former welder and the general secretary of the national federation of pensioners, bristles at the criticism from abroad. “The pensioners and working people are not to blame for this,” he says, his voice rising.

On Monday morning, as capital controls were implemented, Mr. Rallakis’s phone rang furiously as pensioners worried about how to get their money for the coming month. His group drafted a letter to government officials asking for an exception to bank closures so pensioners could draw their checks. They won.

But George Voloudakis isn’t sure they can win in the longterm. A former ship steward, Mr. Voloudakis says he retired too early, but not by choice. When he turned 50 right as the crisis flared, he was essentially pushed out of a job that’s been overtaken by foreigners, he says. “If there were jobs, I would work, but they forced us to retire,” he says.

His salary has been cut from 1,700 to 1,200 euros a month, and he’s lost the two seasonal bonuses that were once the norm. That means no eating out and no more trips – and no stomach for more cuts. Still, this weekend, he plans to vote to accept a deal by creditors to help bring Greece back from the brink.